DEBATE IN THE EU





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In February 1999, the EU's Directive on Rules for the Internal Market in Electricity was required to have entered into national law in Member States. The Directive requires the gradual opening up of the electricity market to competition and enables consumers to purchase their electricity from a variety of sources, including foreign utilities. Although considerably watered down from the Commission's original proposals, the Directive requires the phased implementation of competition within the market over a fixed period. The main requirements for market opening are: -

  • By February 1999, Member States were initially expected to open up their national markets for consumers using more than 40 GWh/yr, calculated at around 22% of the market.
  • The threshold for competition will decrease in three-year trenches. Firstly, three years after the date of Directive's implementation, the markets will be open for users of greater than 20 GWh/yr (around 27% of the national market). In a further three years the threshold will be lowered again to 9 GWh/yr, to allow one third of the market to compete.
  • After this the Commission will make further assessments be and the Council will decide whether to open up the market even further.

    • At the Lisbon EU Summit in March 2000, the Commission proposed that the speed of market opening for both the electricity and gas markets be increased to allow full opening by 2004, as the actual level of Market Opening had already exceeded that required by the Directive. The Summit rejected this and requested the Commission to prepare a report on the impact of accelerated liberalisation on the energy sectors for the EU Summit in the spring of 2001.

    At the Spring summit the French, with support of the German Government, blocked proposals for further market opening, full opening by 2005 Revised Directives have now been proposed for the Electricity and Gas markets and for Cross Border Trade. The European Parliament is currently preparing to discuss these draft Directives. Information below relates to the proposed revision of the electricity Market Directives.

    Consolidated Draft Commission Unofficial draft of the Electricity Directive, showing the full extent of the proposed Commission revisions.

    In December 2001 the European Commission published a study which indicated the changes in the energy market over recent years. The 'Benchmarking' study can be downloaded here

    Consolidated Draft Belgium When holding the EU Presidency the Belgium Government prepared a draft revision of the Directive.

    On January 8th the European Parliament had its first Committee discussion of the proposed amendments by the rapporteur, Claude Turmes. Currently, the ITRE Committee proposes to vote on the issue during the week off 25th February. A summary of these amendments and the full text along with proposals for changes in the Gas Directive, prepared by Bernard Rapkay, can be downloaded in English below. Please note that this is an updated version, from 7th February, and the Amendment numbers have changed. Also below is the full list of proposed Amendment from other members of the ITRE committee. For other languages please visit:

    http://www.europarl.eu.int/meetdocs/committees/itre/20020108/ITRE20020108.htm

    Full Text of the Rapporteur's amendments
    Summary Text
    Amendments from ITRE Committee Members

    To give further explanation to the proposals suggested in the draft Amendments a series of briefing sheets is now being prepared, some of which are available below, with the rest following shortly.

    Matrix of issues addressed in Claude Turmes's Amendments

    Market Concentration

    Disclosure of Electricity Sources

    Import of Electricity

    Decommissioning and Radioactive Waste Management

    Energy Efficiency

    Renewable Energy

    Public Accountability

    The final text of what was adopted by the Parliament can be obtained by clicking here. In a number of areas key amendments were passed this includes: -

  • A requirement for utilities to include information on bills and advertising which show both the mix of fuels used to generate the electricity sold and the subsequent pollution and nuclear waste produced – see disclosure briefing above
  • A requirement to stop nuclear utilities raiding their decommissioning funds to increase their financial capabilities to buy other companies – see decommissioning briefing above.
  • Increase monitoring and reporting on the trend of market concentration – see briefing above.
  • Increase support for renewable and decentralised energy sources.
  • Additional measures to protect small consumers.

    • At the Barcelona EU Summit, the liberalisation of energy markets was discussed and the following text was adopted, which can be obtained by clicking here. This gave significant ground to the French and German Governments, in particular by removing the requirement for competition for domestic consumers – at the insistence of the French Government – and a requirement for a regulator – Germany Government requirement.

    The Parliament’s amendments to the Directive are now being considered by the European Commission, before being discussed by the Council. It is still the intention of the Spanish Presidency to have the debate concluded at the June Energy Council meeting, however, there are an increasing number of countries who do not want to rush the issue, which may result in a delay in the final council discussion.